Tennessee DOT is seeking $308M for backlog projects amid flat revenues. Gov. Bill Lee calls it a "compelling challenge." State faces funding gap for maintenance and construction. Democrats advocate for increased spending on transportation to address deteriorating roads and alleviate traffic congestion.
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Facing a weak revenue outlook, the Tennessee Department of Transportation (TDOT) is requesting $308 million more from the state budget to keep up with the growing cost of maintenance and construction.
Gov. Bill Lee (R) labeled the situation as "sobering" and a "compelling challenge."
Tennessee has some of the nation's top highways, he said, "yet we have a backlog of funding for projects that need to be done in order to keep our roads the best in the country."
The governor made the statement after state Transportation Commissioner Butch Eley and his staff introduced a plan to add $100 million in recurring expenses and $200 million in non-recurring costs for fiscal 2025-26, the Chattanooga Times Free Press noted on Nov. 23.
TDOT benefited from the state's Transportation Modernization Act (2) in 2023 to the tune of $3 billion for major projects in Tennessee's largest cities, as well as $300 million for aid to counties. Yet the state's road system is under stress because of growth and the need for a better maintenance program, officials said.
"It's a balancing act," Eley told the governor during the Election Day budget hearing.
He is requesting an additional $100 million in recurring expenses and $200 million in non-recurring costs for fiscal 2025-26, including $125 million for highway paving, $75 million for bridge maintenance, $50 million for non-recurring statewide road funds for low-interest loans to local governments, $20 million for safety projects, $16.7 million to expand Tennessee's roadside help program, $10 million for litter collection and mowing, and $9 million to cover employee salary and benefits increases.
One of the recent benefits of the law that passed in 2023, Eley explained, allowed a new work process that enabled Tennessee to move quickly on repairs to roads destroyed by Hurricane Helene. The state still has some 600 employees trying to make roads passable in northeast Tennessee where large swaths were hollowed out and left in rubble by the storm's flooding.
Additionally, TDOT is embarking on its first public-private toll lane project, planning to take bids in 2025 and begin work in 2026 on an elevated highway from Nashville to Interstate 840 near Murfreesboro.
Tennessee's Fuel Taxes Revenues Have Flattened Out
TDOT's planned increase for a total budget exceeding $2.4 billion would come with a proposed $602 million for repairs, and $454 million from the federal government for resurfacing and bridge repair.
Federal money for the state agency is expected to increase $23.8 million to $1.4 billion in fiscal 2025-26, which starts next July 1. Yet state revenue is expected to dip $42.3 million to $1.28 billion, leaving the state in a $12.3 million lurch.
State transportation officials are projecting flat user fee revenue amid rising construction costs, which are up about 100 percent since 2021, the Chattanooga news source reported. Tennessee depends heavily on fuel taxes for revenue, but those monies are not producing enough revenue to continue improving roads and bridges, TDOT noted.
The sluggish outlook is accompanied by a business tax break that is hurting the state's overall revenue this year, already causing it to rebate nearly $865 million.
Democrats in Tennessee's House and Senate recently launched a drive called "Rocky Top, Not Rocky Roads" to push the Republican supermajority to spend more on transportation to fix potholes and relieve traffic congestion.
They decry the state's deteriorating roads, lack of mass transit development and allowing transportation projects to hit a $34 billion backlog. TDOT estimates each of the state's urban motorists lose $989 a year because of traffic delays and greater fuel consumption.
State Rep. Aftyn Behn, D-51st District in East Nashville, said the state needs to amend its "pay-as-we-go" philosophy because it limits TDOT from investing in large-scale projects by forcing the state to fund projects without borrowing and pushing costs higher.
Democrats also have said that they want the state to work with local governments on regional mass transit such as light rail to extend the life of roads and cut the number of vehicles on Tennessee's highways.
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